Significant forestalling activity by taxpayers was captured within June 2021 UK residential transactions statistics. Since then, an expected but noticeable decrease has been observed within provisional July 2021 UK residential transactions statistics.
Forestalling is when advanced action is taken to prevent an anticipated event. For these statistics, forestalling refers to taxpayers completing property transactions earlier to take advantage of government housing market policies.
Forestalling was caused in June 2021 by the reduction of the temporarily increased nil rate band to £250,000 for residential Stamp Duty Land Tax (SDLT) from 1 July 2021, alongside the ending of the temporarily increased nil rate band to £250,000 for residential Land Transaction Tax (LTT) in Wales.
Paul Stockwell, Chief Commercial Officer at Gatehouse Bank, comments:
“It is no surprise that July saw a significant slump in transactions compared to June’s spectacular highs. A record number of buyers had been eager to complete their sale before the stamp duty deadline.
“Transactions may creep up again in August and we can expect another flurry of activity in September as buyers try to complete sales before the final stamp duty savings are removed. This wave is unlikely to match June’s in scale but the effect of the cliff-edge will still be in attendance.
“While transaction levels are now set to stabilise, the Bank of England’s figures show that mortgage approvals still surpass pre-pandemic levels, indicating that buyer demand remains strong. Low supply is likely to be the only thing which could hold transaction levels back.”